Adam JacksonAugust 10, 2023
The CEO cited disciplined pricing strategy and new data licensing agreements.
Nova cannabis Archives - Green Market Report
Adam JacksonAugust 10, 2023Adam JacksonMay 11, 2023The company continues to test price elasticity and consumer buying trends, adjusting pricing across all categories.
StaffMarch 29, 2023
The Daily Hit is a recap of the top financial news stories for March 29, 2023.
On the Site
Columbia Care Sales Fall in Fourth Quarter as Company Exits Markets
Columbia Care Inc. (NEO: CCHW) (CSE: CCHW) (OTCQX: CCHWF) saw its net loss for the fourth quarter ballooned to an eye-popping $300 million, compared with last year’s net loss of $53 million for the same quarter. Read more here.
Schwazze Loses $18.5 Million Despite ‘Record’ Revenue
Denver-based Medicine Man Technologies Inc., which does business as Schwazze (OTCQX: SHWZ) (NEO: SHWZ), posted an $18.5 million loss for the full year of 2022, due to various acquisitions and its entrance into New Mexico. Read more here.
Unrivaled Brands Posts Profits, Reduces Liabilities 40% Following Restructure
On the heels of a turbulent year of restructuring, Unrivaled Brands (OTCQB: UNRV) posted positive preliminary financial results for the fourth quarter of 2022, with operating profit for the period reaching $8.8 million. Read more here.
CV Sciences Runs Low on Cash as Sales Fall from Last Year
CV Sciences Inc. (OTCQB: CVSI) saw fourth-quarter sales fall 22% compared to a year ago, due to strong competition and continued supply chain challenges. Sales increased 3% sequentially in the fourth quarter to $3.9 million versus $3.8 million in the third quarter of 2022. Read more here.
Nova Cannabis Sees Record 2022 Revenue, Driven by Flexible Pricing, SNDL Partnership
Nova Cannabis Inc. (TSX: NOVC) posted impressive growth in its fiscal 2022, driven by record sales, more stores, and key partnerships. The Canadian cannabis retail company posted its financial and operating results for the fourth quarter and full-year 2022 ending Dec. 31, 2022. Read more here.
In Other News
Curaleaf Holdings
Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF) entered into a definitive agreement to acquire Deseret Wellness, the largest cannabis retail operator in Utah, in a cash and stock transaction valued at approximately $20 million. The transaction is expected to close imminently, subject to customary closing conditions. Read more here.
CEA Industries
CEA Industries Inc. (Nasdaq: CEAD, CEADW) posted revenue for the fourth quarter of 2022 of $1.5 million, compared to $3.1 million for the same period in 2021. The decrease was primarily attributed to supply chain and project delays as well as a reduction in the size and number of signed contracts during 2022. Read more here.
Debra BorchardtMarch 28, 2023
SNDL has also delayed its earnings and warns of charge.
Adam JacksonDecember 21, 2022
SNDL (Nasdaq: SNDL) and Nova Cannabis (OTCQB: NVACF) have fashioned new terms for their existing relationship as the two look to grab more market share in a consolidating Canada.
In a statement, SNDL said that the new arrangement would create a “well-capitalized cannabis retail platform in Canada under a vertical integration model with SNDL’s upstream capabilities.”
“With this strategic partnership, Nova will be well positioned to thrive and focus on growth and profitability in the coming years through this world-class cannabis retail platform,” said SNDL CEO Zach George. “SNDL will continue to support and sponsor Nova in a compliant manner while leveraging our capital base and retail M&A pipeline to improve Nova’s trading liquidity and future growth.”
When the deal’s sown up, Nova will receive retail contribution and corporate service from SNDL, as well as debt restructuring that includes a C$15 million revolving credit facility that SNDL will wipe.
The injection, which is expected to be fully drawn at the time of the closing of the transaction, will immediately provide Nova with additional liquidity to the tune of C$5.5 million.
The deal also provides for a return of equity, with around 14.3 million shares of Nova held by SNDL’s holdings scheduled to be returned to Nova’s treasury for cancellation.
SNDL said it plans to reduce its equity ownership in Nova to below 20% through a capital distribution of Nova Shares owned by SNDL to its shareholders, increasing liquidity.
Additionally, SNDL will receive intellectual property rights as consideration to Nova’s fast-growing Value Buds banner of 88 stores and the license to grant Nova to operate the Value Buds, Spiritleaf and Superette banners.
The two became tethered when SNDL in March spent C$320 million to snap up Nova’s majority shareholder, Alcanna. Then-Nova CEO touted SNDL’s ability to provide infrastructure and financial resources to its value-based model to drive scale and expansion.
The company said it partnered with SNDL for Value Buds’ private label strategy with goals to remain aggressive with its pricing strategy for the two’s white label venture in order to capture further market share in Canada.
In last month’s earnings release, Nova stated that it wants to “disrupt and strengthen the cannabis retail market by promoting a wide range of cannabis products at everyday best-value prices, while encouraging greater migration from the illicit cannabis market.”
Nova said its starting to raise pricing across all categories in Alberta to test elasticity and understand consumer buying trends and expects higher margin results in the fourth quarter. It also expects to add three more stores in Alberta and Ontario in the remainder of this year and early next.
Anne Fitzgerald, lead independent director of Nova, said that the deal “provides Nova with a unique opportunity to further transform the cannabis retail market in Canada and enhance its business in a material way to the benefit of all our shareholders.”
“A special committee of independent directors of Nova has completed an extensive due diligence process including the advice of independent financial advisors and has concluded that the transaction is fair from a financial point of view to Nova shareholders. The support of SNDL, both operationally and financially, allows Nova to remain laser-focused on growth and profitability.”
Adam JacksonNovember 14, 2022
Despite revenue gains, company recorded a net loss of C$100M.
StaffNovember 8, 2022
The Daily Hit is a recap of cannabis business news for Nov. 8, 2022.
ON THE SITE
Planet 13 Picks Waukegan Over Chicago
Las Vegas-based cannabis company Planet 13 has decided to open its Illinois retail shop in Waukegan. Planet 13 partnered with Chicago-area social equity applicant Frank Cowan to win one of 185 new retail licenses that recently were issued by the state of Illinois. Read more here.
Star Buds Cannabis Owner Stays Afloat as Debt Deepens
CordovaCann Corp. (CSE: CDVA) (OTCQB: LVRLF) rose in trading Tuesday after it published its financial statement for fiscal 2022, which showed improvements in revenue and cost control despite operating with a heavy deficit. Cordova recorded $13.5 million in revenues, up 23% versus $10.3 million the year prior, primarily driven by the growth of the Star Buds Cannabis Co. retail footprint in Canada, the company said. Read more here.
Nova Sees Record Profits As It Trims Losses With Value Brand
Nova Cannabis Inc. (TSX: NOVC) recorded a net loss of $1.5 million versus $6.2 million loss last year; slightly up from a $1.4 million loss in the previous quarter. The company attributed the reduction in loss over the year primarily a result of the increase in sales and gross margin. Read more here.
AFC Gamma’s Net Income Rises 45%
AFC Gamma, Inc. (NASDAQ: AFCG) announced its financial results for the third quarter of 2022. with a net income of $11.5 million or $0.57 per basic weighted average share of common stock. This is a 45% increase in net income from last year’s third quarter. It missed Zack’s estimate, which was listed at $0.67 per share. Read more here.
IN OTHER NEWS
Pineapple Ventures
A pair of investors who said an affiliate of California pot firm Pineapple Ventures owed them $75,000 stemming from a financing deal have come to a conditional settlement in the case, a recent court filing shows. Anna Vocino and Alfred Loren Tarquinio had said in their Los Angeles County Superior Court suit that they agreed to lend money to defendant Neu-Ventures Inc. Read more here.
CNBX Pharmaceuticals
CNBX Pharmaceuticals Inc. (OTCQB: CNBX), a global leader in the development of cancer related cannabinoid-based medicine, has acquired a controlling interest in TaGeza Biopharmaceuticals Ltd. Co-founder Benjamin Dekel will continue to serve as the company’s chief scientist, and CNBX Chairman Gabriel Yariv will assume the position of TaGeza Biopharmaceuticals CEO. Read more here.
Adam JacksonAugust 12, 2022Nova Cannabis Inc. (TSX: NOVC) posted positive results after the market close on Thursday as the company pivots toward more competitive pricing under a new discount banner.
The Canadian cannabis company released its financial report card in the period ending June 30, 2021.
Nova delivered approximately $56.3 million in total revenue during the period, a 90% gain versus the same period last year — beating the Yahoo Finance Average analyst estimate for revenues of $38.66 million.
Nova reported that second-quarter sales rose 90% to $56.3 million over last year and saw a 13% increase over the first quarter of 2022. The company attributed the sales growth to the 29 retail cannabis stores that were opened since March last year, and rising sales from stores that were re-branded to the Value Buds discount banner at various times throughout 2021.
“The performance of our Value Buds stores continues to outpace the growth of the industry as we reported record sales for the second quarter of 2022, underpinned by equally strong sales and gross margin growth that is driving greater operating leverage to the bottom line,” said CEO Marcie Kiziak.
Nova recorded a net loss of $1.4 million, versus a net loss of $7 million in the same period last year. The reduction is primarily a result of the increase in sales and gross margin over the period.
Gross margin for the period was $10.6 million, up $5.4 million or 105.0%, from $5.2 million for the same period in the prior year. The gross margin as a percent of sales was 18.8% for the period.
During the comparative period for 2021, the stores were operated under the Nova Cannabis, YSS and Sweet Tree banners with a different operating, pricing and margin strategy than in the second quarter of 2022 when sales came primarily from the stores converted to the Value Buds discount banner.
Since then, the company revised prices at certain retail locations where the competitive response has waned which has led to increases in gross margin percentage.
Nova has an uncommitted revolving credit facility with Sundial in an aggregate principal amount not to exceed $15 million. Currently, $8.7 million in principal and accrued interest is outstanding on the credit facility.
The company currently has $6.2 million worth of cash.
Last month, Nova launched an at-the-market equity offering program, which will allow the company to issue up to $20 million of common shares from treasury to the public at the discretion of the company and subject to market conditions and regulatory requirements
“Delivering superior value to cannabis consumers will become increasingly important in the current economic environment, and Value Buds is purpose built for this,” said Kiziak. “We will stay the course by being disciplined in how we expand our footprint, remaining customer focused and choosing the best real estate for our strategy, whether through acquiring stores or building our own.”
Debra BorchardtMarch 21, 2022
Nova Cannabis Inc. (TSX: NOVC) reported its audited annual consolidated financial statements and management’s discussion and analysis for the year ended December 31, 2021. Nova reported that fourth-quarter sales increased 175.9% to $47.6 million over last year and was a 23.2% increase over the third quarter of 2021. The company attributed the sales growth to the continued conversion of legacy stores to the Value Buds banner throughout 2021 and the opening of new stores, particularly in Ontario.
Nova reported that net losses increased 10% in the quarter to $5 million over last year’s net loss of $3 million for the same time period. The increase in the net loss was attributed to the company recognizing a lower operating profit before depreciation, measurements, and other costs in the current year compared to the same period in the prior year and an increase in depreciation, impairments, and finance costs.
“We launched Value Buds in 2021 to provide cannabis consumers in Canada with a better option, and the traction of our store format has been a resounding success. Once again, we delivered strong sequential and year over year sales growth for the quarter and we now have 78 stores open across Alberta, Saskatchewan, and Ontario,” said Darren Karasiuk, CEO of Nova. “Following Sundial’s pending acquisition of our majority shareholder, Alcanna, we will gain a cannabis-focused partner that is committed to supporting our value-based model with the infrastructure and financial resources to drive the expansion of our disruptive strategy at a much larger scale.”
Full Year Results
Sales for 2021 were $134.4 million, a 112.2% increase from $63.3 million in 2020. The net losses for the year ballooned to $20 million from the previous year’s net loss of $2 million. The company blamed the increasing net loss to the increase in operating losses. The operating losses before depreciation, measurements, and other costs for the year were $3.6 million (2020 – $5.7 million profit). The decrease in profit was attributable to operating at a reduced gross margin as a percent of sales, increased selling and distribution expenses as a result of
operating more stores, along an increase in administrative expenses in the current year. Administrative expenses in the current year include $0.8 million in share-based payment expense, $0.5 million in severance expense, along with increases in legal and professional costs related to Nova now being a separate publicly traded corporation listed on the TSX (in the prior year it was a wholly-owned subsidiary of Alcanna).
On October 7, 2021, Sundial Growers Inc. (NASDAQ: SNDL) agreed to buy the common shares of Alcanna Inc. which is Nova’s majority shareholder. On February 25, 2022, Alcanna and Sundial mutually agreed to extend the outside date for closing the Sundial-Alcanna Transaction to March 30, 2022, in accordance with terms of the Arrangement Agreement to complete the required closing matters contemplated by the Arrangement Agreement.
Nova has seventy-eight (78) stores open, an increase of forty-four (44) stores since December 31, 2020, and all legacy Nova branded stores have been converted to Value Buds.
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